🧐Self-Lending Pods Example

Below you will find an example of how a Self-Lending DCLP Pod can offer mutually beneficial outcomes for both lenders and for borrowers.

Key Info:

• 90% of Interest from the borrower goes to lenders.

• 10% goes to the protocol.

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Scenario Breakdown:

User A (Borrower):

• Borrows $5,000 to farm with $10,000.

• Earns 50% APR on farming = $2,500/year.

User B (Lender):

• Lends $1,000.

• Earns 49.5% APR = $495/year.

Key Points:

• User A pays 55% APR on the $5,000 loan = $2,750/year.

• User A gets 90% of that interest back because they’re also a lender.

• User A’s net cost: Pays $770/year (including $275 to the protocol and $495 to User B).

• User A’s net profit: $1,730/year.

• User A’s effective APR: 34.6%.

Why It Works:

• User A earns 50% APR on $10,000 but only pay interest on the borrowed $5,000.

• User B earns 50% APR on their $1,000 loan.